Your research projects have started to show potential and you need to raise more funds for research, development and clinical testing. As your company grows the development of your management team will become as important as the scientific development. You will next need to be thinking ahead to strengthen capabilities in regulatory affairs, finance, commercial and market development in your management team.
The Biotech industry is growing rapidly. Talent is very much in demand. Demand is greater than supply. You need to have a talent development strategy comprising recruitment, succession planning and competency development. If you do not have a talent management strategy in place you also risk losing your own talent!
Potential investors will want to meet your management team as part of a due diligence process and hear them speak about how the business is developing and overcoming the challenges it faces. I have been through it with my own business!
Having a high quality management team will help to maximise the value of your business in the eyes of investors. A weak team will hinder your attempts to raise investment funds. A mis-hire or a non-hire while your business is growing at 15 – 20% a monthly can be crippling.
Whichever route you take to raise capital the requirements are similar. The major change is that the financing of the business has become as important as the scientific development
- Predictable and consistent revenue. The business needs to be mature enough and its systems robust enough so that it can reliably forecast the next quarter and the next year’s expected income or reduction in losses! Investors or stock markets do not like it when companies miss earnings targets or have trouble predicting what they will be. Potential investors will question your team about this
- A strong management team. You need an experienced top teamin place who have been with the company 2-5 years. Recent joiners with less than a year’s service will not be credible
- Trade Sale is much more discrete and may not become public until it happens. An IPO becomes public a year before the event because of “book building” and getting approval to join the listing queue. This will put a lot of pressure on your team
- Robust Systems and Processes. Investors will look for robust business processes in place. This is important even if a company stays private. But going public means every aspect of how the company is run will be closely examined.
- Long Term Plan. The company needs to have a long-term business plan with financials and sales forecasts prepared for the next three to five years to help investors and the market see that the company knows where it is going.
Quality of Leadership
This is one of the biggest factors investors look at beyond the financials when considering buying into your company.
Your top team will typically include: Chairman, CEO, CFO, CMO, SVP Early Stage Development, SVP Late Stage Development, Head of Govt & Regulatory Affairs, Head of IT & AI, Chief Business Officer (Purchasing, HR, Administration), Chief Commercial Officer (Marketing and Sales). These people need to be high quality and not just names on doors. They will be quizzed by the Venture Capitalists and Investment Banks. Your investors will expect these people to have track record and have been with your company at least 2 years.
Preparing for and executing major loan finance, a trade sale or an IPO involves major business transformation and operational disruption. These can be heavy burdens for startups which have been used to running lean.
Your recruitment and development plan will be almost as complex as your scientific development plan. It will need to be executed in parallel to ensure you have the right people in the right place at the right time! Recruiting a senior executive from a competitor typically takes six months as there will be a 3 months notice period in addition to the hiring process. Senior recruits may take longer as C suite recruits are often on 6 months notice. If you want to recruit a senior executive from a competitor you may need to do this very confidentially and using an executive search firm.
Your company may also need part time Independent Non-Executive Directors with prior experience to sit on audit, compensation and governance committees.
We can help you to set up an HR function and assist them when there is a surge of recruitment. We are experienced in biotech, food tech and medical device recruitment, have a database of candidates and can manage the necessary confidentiality. We have a global network of offices to enable us to find the talent you need. We will work with you to develop and execute this plan in a cost effective manner.
If you need advice or a discussion, please contact Mark Geary, CEO of Asianet Consultants: firstname.lastname@example.org